A strategic alliance between Richardson GMP Ltd. and Cormark Securities Inc., announced by both Toronto-based firms Wednesday, will allow Richardson GMP to fill the gap left after its parent firm sold off its capital markets business last year, says Andrew Marsh, president and CEO of Richardson GMP.
“I recognized that we were now an independent distribution channel that represented a [network of] very high-quality professional advisors that would be attractive to other independent and like-minded firms,” Marsh said.
Marsh said Richardson GMP and Cormark are trying to build an “independent coalition,” in which the two firms offer complementary services.
As part of the alliance, Richardson GMP’s advisors and their high net-worth clients will have preferred access to Cormark’s research and new investment issues and ideas. Cormark’s clients will benefit from collaboration with Richardson’s 165 advisory teams.
“We wanted to select partners that provided great research for our end clients and for our advisors, offered us access to capital-raise opportunities and also [allowed us] to refer our business-owner clients to people who can give them advice on mergers and acquisitions and capital-raising activities,” Marsh said.
Existing relationships between Richardson GMP advisors and Cormark bankers and executives helped smooth the way to a deal, said Alfred Avanessy, managing director and head of investment banking at Cormark. Before joining Cormark in 2016, Avanessy worked at GMP Securities for 10 years.
“We know capital markets well, and Andrew and his team know wealth management well, and this way we get a big missing piece for our issuers, which is that retail channel,” Avanessy said.
A year ago, Toronto-based GMP Capital Inc., Richardson GMP’s parent firm, announced that it would sell the bulk of its capital markets business to Stifel Financial Corp., a financial services holding company headquartered in St. Louis, Mo.
The sale of GMP Capital’s capital markets business was when executives at the two firms started thinking that Richardson GMP and Cormark “already work so well together” that it made sense to formalize the relationship through an alliance, Avanessy said.
Both firms expect the alliance will give them opportunities for cross-referral.
“While most wealthy families appreciate having their blue-chip core portfolios,” Marsh said, “they are also typically entrepreneurs themselves and are looking for introductions to really good investment opportunities, which we also think Cormark brings to the table.”
When asked if the alliance could lead to a closer partnership between the two firms, Marsh said, “An alliance is a really good start. It gives each of us what we’re looking for, and all we’re looking for, right now.”
Marsh also said the alliance will be part of Richardson GMP’s ongoing recruitment push as it looks to add advisors.
“When you add a firm with the reputation of Cormark,” Marsh said, “[it’s] yet another reason to consider a move to us [as] being a very attractive thing to do.”